Once Upon a Time...

April 08, 2005

Not So Fast, Please: Contextual Libertarianism, One More Time

[UPDATE: I sent a note to Steve Chapman about this piece, telling him that while I often agreed with him completely, I didn't in this case for the reasons I explain. Mr. Chapman kindly replied: "You make a fascinating and very persuasive case, and I wish I'd thought of that angle."

Many thanks to Mr. Chapman for his kindness in answering. He made my weekend.]

[AND MORE: In an Update to his original post, Mr. Franks graciously considers my argument, and generously concedes the point.]

I've written on numerous occasions about the importance of context, and about the special importance of cultural - social - economic context when analyzing many current events. (If the general subject is of interest to you, this essay about related issues, viewed from a somewhat different perspective, might be worth your time.) I am absolutely convinced that the kind of contextual approach that I have discussed is crucial to the kind of richer and more complex libertarian approach that I try to utilize.

One story in recent weeks has brought a heightened focus to certain of the dynamics that concern me here: whether a pharmacist should have the right to refuse to fill prescriptions due to the pharmacist's own particular beliefs, whether those beliefs are religious in nature or otherwise. The easy libertarian answer is, "Yes, of course!" If freedom means anything at all, it surely means that anyone in any profession should be free to follow the dictates of his own conscience. For many libertarians, that is in essence the totality of the argument.

This post presents what we might call this "pure" libertarian perspective, and it approvingly links to a column by Steve Chapman, a writer I frequently enjoy and agree with. Here is the core of Chapman's argument:

The New York Times, which defends the right of women to control their own bodies by ending their pregnancies, thinks pharmacists have no right to control their own bodies by refusing to dispense certain pills. It editorialized, "This is an intolerable abuse of authority by pharmacists who have no business forcing their own moral or ethical views onto customers who may not share them." By this logic, however, customers are entitled to force their moral or ethical views onto pharmacists who may not share them.

In a free society, writers are allowed to write, and publishers to publish, material that others find dangerous, immoral or offensive. But neither they nor readers have a right to insist that bookstores carry what they produce. They are obliged to find others who are prepared to cooperate with them. And if that means their work goes unsold and unread, so be it.

The same principle of voluntary cooperation should govern this dispute. As long as morning-after pills are legal, women are entitled to buy them from willing sellers. But that shouldn't allow them to force transactions on sellers who are not willing.

And Chapman comes tantalizingly close to the underlying issue, but doesn't quite get there (my emphasis):

Diversity is one of the celebrated values of modern American society. But in this case, what each side demands is state-mandated uniformity. Abortion-rights advocates want every pharmacy that carries oral contraceptives to dispense them regardless of the moral view of the pharmacists. Abortion opponents want every drugstore to let pharmacists decide what drugs they will dispense, regardless of the moral views or business interests of the owner.

So here's a compromise: Let individual pharmacies decide what drugs to dispense, and let pharmacists who disagree find other places to work. Let patients who can't get their prescriptions filled at one pharmacy go to another pharmacy with a different policy.

Chapman is right to focus on the element of "state-mandated uniformity" -- but he doesn't take this issue back to its roots, as we'll see in a moment. Dales Franks add his own, somewhat blunter commentary to Chapman's column (my emphasis again):

The trouble with liberty is, of course, when other people exercise theirs, it may be inconvenient for people who disagree with that exercise. Well, tough noogies. In a free society, people are going to do things you find immoral or unpleasant. Deal with it.

You don't have a right not to be offended. You have no right not to be confronted by people who disagree with you. And you certainly don't have the right to force others to comply with your wishes by law. And in return, none of us have the right to force you to agree with us.

In a free society, you transact business with those willing to transact business with you. That's your right, not to force transactions on the unwilling.

The underlying assumption, in both Franks' remarks and in Chapman's column, is that this dispute arises in a society which is essentially free.

But is that true? In one crucial sense, it is not. And that's why the answers they provide aren't entirely satisfactory.

The fundamental questions that neither commentator reaches are these: why does the state license pharmacists in the first place -- and the critical related question, should it? To answer these questions, let's take a look at a typically incisive and informative column from Jacob Hornberger, President of The Future of Freedom Foundation: "Licensure: A Lawyer Protection Racket." As you read this excerpt, note that the principles are identical for compulsory state licensing of any profession:

As the criminal-justice crisis in Virginia perfectly reflects, occupational licensure does not ensure competence or, for that matter, ethics. Instead, it seduces the public into believing that because a lawyer is licensed by the state, he must be competent and ethical.

So what is the purpose and effect of occupational licensure? It's very simple -- licensure operates as a protection racket for attorneys, protecting them from unbridled competition. By limiting the supply of attorneys through a rigorous and expensive system involving getting into and attending law schools and then passing an extremely difficult, state-administered bar exam, lawyers are able to keep the number of practitioners artificially low, thereby enabling them to charge higher prices to the public. In fact, as J. Gordon Hylton, professor of law at Marquette University, pointed out at a law conference at the University of Virginia School of Law, the reason Virginia imposed bar exams in the first place as a prerequisite to practicing law was to impede blacks from becoming attorneys, especially since the number of black attorneys was increasing during Reconstruction, when there were no state-imposed impediments to practicing law.

By repealing occupational licensure laws, we would still have, of course, incompetent and unethical attorneys, but at least consumers would be much more wary about the particular attorney they retained. Local and state bar associations could help consumers choose among a broad array of legal services by publishing lists of recommended attorneys and services. Prices for legal assistance would be likely to plummet, so that consumers would have more-reasonably priced legal services.

Please note that this pattern is the same one that occurs throughout American history, beginning in the late nineteenth century: certain already vested business interests employ the power of the state to restrict competition and prevent the entry of newcomers into their field. It is only the failure of the intellectual class that has attributed the distorted and distorting results to capitalism itself. This is most assuredly not the free market in operation: it is the old story of vested interests using political pull to rig the market in their favor, thus impeding the operation of the free market. And this is the pattern that the Democrats raised to a high art in the mid-twentieth century, and that the Republicans are now perfecting even further, with their "K Street project." I emphasize again: this is not the free market or capitalism at work. It is what I refer to as the New Fascism: the amalgamation of nominally "private" business with government, a lethal combination that now grows at an exponential rate.

I wrote about the historic roots of this phenomenon at the beginning of one installment of my "I Accuse" series on foreign policy, where I examined the dynamics of corporate statism, or the New Fascism, in the domestic sphere:

I discussed a number of elements of Bush's New Fascism in Part I of this essay. There is a further element of this New Fascism which needs to be understood in more detail: the dominance of corporate statism in our domestic economy. This phenomenon actually began in the late 1800s, and the federal government's involvement in the growth of the railroad industry was one of its very first examples. In fact, the railroad industry was in the forefront of the drive to corporate statism over a long period of time, and it was the railroad industry itself that sought, and achieved, nationalization during World War I. [See Chris Sciabarra's article on this subject for more details.] More specifically, it was the leaders of certain vested interests in the railroad industry who wanted a government take-over, to protect their own companies from more efficient competitors and to eliminate what they viewed as “cut-throat competition." I have discussed this phenomenon before, quoting an article by Sam Wells (who in turn quotes Gabriel Kolko, whose pathbreaking work provided tremendous ammunition to libertarians, much to Kolko's dismay):

"In his path-breaking study of the Progressive Era, New Left historian Gabriel Kolko reached the following 'startling' conclusion about who was actually behind the push for the establishment of the Interstate Commerce Commission and other major agencies of governmental intervention on the federal level:

"'Despite the large number of mergers, and the growth in the absolute size of many corporations, the dominant tendency in the American economy at the beginning of [the twentieth] century was toward growing competition. Competition was unacceptable to many key business and financial interests, and the merger movement was, to a large extent, a reflection of voluntary, unsuccessful business efforts to bring irresistible competitive trends under control. Although profit was always a consideration, rationalization of the market was frequently a necessary prerequisite for maintaining long-term profits. As new competitors sprang up, and as economic power was diffused throughout an expanding nation, it became apparent to many important businessmen that only the national government could rationalize the economy. Although specific conditions varied from industry to industry, internal problems that could be solved only by political means were the common denominator in those industries whose leaders advocated greater federal regulation. Ironically, contrary to the consensus of historians, it was not the existence of monopoly that caused the federal government to intervene in the economy, but the lack of it.'

"Kolko's historical research demonstrates that giant businesses were not only unable to prevent new competitors from entering their industries, but they were less profitable than many much-smaller firms. Having failed to establish control over the economy by purely market means, certain big business leaders became the chief initiators of 'progressive' legislation on the national level. And, as Kolko goes on to prove, the regulations and commissions were 'invariably controlled by leaders of the regulated industry, and directed toward ends they [certain big business interests] deemed acceptable or desirable.'

Today, this amalgam of big business interests and governmental power is in the process of being perfected, by means of the lobbying industry. Washington Monthly carries an enormously valuable article which analyzes this practice in truly horrifying detail (horrifying at least to those who place a premium on unregulated capitalism, as I do). Here are some excerpts. ...

See that earlier essay for many more details. Let me repeat the central point: government regulation is always the result of efforts by already vested business interests to stifle competition and artificially restrict the market for their own benefit, using the power of the state to accomplish these ends. I say "always" because, although theoretically there might be a case where this is not true, I have yet to come across one. If you research any business regulation far and deep enough, you will finally discover some company or companies, or some group of businessmen, who lobbied for the regulation -- precisely because it would serve to protect their already existing share of the market, if not increase it, and shut out new competitors. Despite all the propaganda to the contrary, such regulations are never for the benefit of "the public" or "the consumer." That is the propagandistic justification used to sell government controls to a gullible public -- and it is the statist myth that still needs to have a stake driven straight through its heart, so that it will die the painful death it so richly deserves.

And it is this pattern which underlies the licensing of doctors, lawyers -- and pharmacists. If you doubt the power of the state in this area, take a look at this page: every state has its own pharmacist licensing body. Here's a typical mission statement (they all offer much the same verbiage), from Arkansas:

The purpose of the Arkansas State Board of Pharmacy is to promote, preserve, and protect the public health, safety, and welfare by and through the effective regulation of the many aspects of the drug delivery system. The agency licenses and regulates not only pharmacists and pharmacies, but also the distribution system where there is sale, delivery, or distribution of prescription drugs, medical gases, durable medical equipment, and legend devices. To accomplish the mission the Arkansas State Board of Pharmacy must test the pharmacists; license, regulate, and discipline all licensees; and act as an expert in the dissemination of information regarding the laws and regulations which govern the practice of pharmacy and its related fields.

I have only two questions about this, and about any similar "mission statement." First, why on earth would anyone trust government bureaucrats to carry out this mission effectively and safely, and oh-so-disinterestedly? They're only human beings like you and me -- and probably significantly worse than we are in most critical respects. After all, they went to work for the government, where incompetence is rewarded, and you most often only fail upwards.

But second, and much more importantly, why does anyone grant that the state has the right to do this in the first place? Certainly, the state has the power to do it. But the right? Where does that come from? And remember Hornberger's point: "licensure operates as a protection racket for attorneys, protecting them from unbridled competition." The same is true for pharmacists, and any other protected group. And if compulsory state licensing ended, private pharmaceutical associations would provide needed information to consumers -- and more importantly, and much more disastrously for the protected class, "Prices for legal assistance would be likely to plummet, so that consumers would have more-reasonably priced legal services." Substitute pharmacists for lawyers, and the argument -- and the fear -- are the same.

And since Illinois is the state in question in the story at issue, take a look at this page -- and then look at Illinois' Pharmacy Act -- and marvel that anyone at all manages to navigate through this bureaucratic and regulatory nightmare.

The major point is a very simple one: the pharmacy profession is a state-enforced monopoly. In other words: the consumer and the pharmacist are not equal competitors on the playing field. The state has placed its thumb firmly on the scales -- and on one side only. That is the crucial point, from which all further analysis must flow.

This situation is closely related to the dilemma I addressed in a post entitled, "Yes, There Should Be A Harvey Milk School," from September 2003. After noting how seriously at risk the children involved were, and that they often had literally nowhere else to go for an education or for basic safety, I wrote:

As a libertarian, I want the government at all levels ideally out of education altogether. I want the entire system privatized. But that's obviously not going to happen for a long, long time, if ever.

In the meantime, these kids are in danger. For the great majority of Americans, including school-age kids, the government has a monopoly on education. As long as that's true, the very least the monopolist in charge -- i.e., the government -- can do is keep these kids out of danger.

That's the long and short of it as far as I'm concerned. All the rest -- the charges of “segregation," the arguments about whether this is the “best way" to foster greater tolerance and fight homophobia, etc. -- is completely irrelevant, and badly misplaced. If adults want to fight for greater tolerance, fine. Then you do it. Don't ask children to do it for you. And certainly don't ask children whose lives are at risk.

That's all.

In the case of the school, because the government has a de facto monopoly, it incurs certain obligations -- and those obligations include the minimal requirement that the children in the state's care be kept safe from harm. Similarly, the state has created a government-enforced monopoly for licensed pharmacists. Given that central fact, the least the state can do is ensure that everyone has access to the drugs they require -- and whether a particular pill is of life and death importance is for the individual who wants it to decide, not the pharmacist and most certainly not the government.

It is not an answer to say that the customer can "go to another pharmacist." Perhaps another pharmacist is not easily available. Perhaps this is the only store the customer can easily reach, without incurring some significant cost (in travel time, expense, or in some other way). But the critical point is this one: the customer is not dealing with a genuinely free market. The state, via its enforced monopoly of licensed pharmacists, has distorted the market at the most fundamental level -- and that is the reality that confronts any individual customer. It is a gross injustice for the government to say, in effect: "Well, yes, we've fundamentally distorted the market of pharmacists available to you. But we've done it to protect you, and for the public's good. Since that concern trumps everything else, now you have to deal with it." Remember the immense power of the government in this context -- and the comparative impotence of one individual.

Let me be clear: although I myself think the stronger argument can be made to the effect that pharmacists should not be allowed to discriminate as long as they are part of a state-enforced monopoly, I acknowledge that a colorable argument can be made in the other direction. One can certainly maintain that legislating against freedom of choice on the part of pharmacists (or those in any other profession) restricts freedom still more, and such a result is to be avoided at all costs. But the response to that position is not difficult to see, along the lines I've indicated: pharmacists operate on a plain that is anything but level, since entry into the field is restricted, often arbitrarily and irrationally, by the power of the state. You thus begin with the consumer at a significant disadvantage: he or she is up against an individual who is a state actor in certain crucial respects. And you then permit the state actor to discriminate in ways that may be irrational and unjustified. Perhaps freedom is more damaged by that method of proceeding.

My major point is that neither solution is satisfactory, for one simple reason: once the state intrudes into economic affairs in this manner, no solution is fair and no solution treats all parties equally. The minute the power of the state comes down on one side of a transaction, everyone loses. And once that initial point of state intervention has been passed, any "solution" will inevitably restrict freedom still more. That is the problem with a "mixed economy," an economy that mixes some degree of freedom with some degree of coercion. When coercion is present (state coercion, as here, or any other kind), no result is just -- and no one is safe. And even one set of regulations distorts the market, those distortions are then used to justify further regulations, which distort the market still more, which distortions are used to rationalize still more regulations...and you finally end up with the kind of incomprehensible and mindnumbing regulatory schemes that we have today in every major industry (and most minor ones).

But this is the much more complex reality that the easier libertarian answer avoids: the easier answer treats an immensely complicated reality as if it consisted only of basic principles, principles that have remained uncompromised, pure and uncomplicated. But that is not the reality we're dealing with at this point, and it is not the reality that has faced anyone in the United States for over a hundred years (although I obviously grant it was not nearly as bad a century ago, but it still was not fully free even then). The state is involved in almost every single transaction in which we take part in one way or another, every minute of every day.

And my major goal in writing this essay is to implore many libertarians, with whom I certainly share any number of values and goals, to engage with this more complicated reality, rather than setting it aside as if it doesn't exist. It does exist -- and what it requires is that we go back to basics. In this case, that means that we must work ultimately for the day when the state removes itself from areas such as the licensing of pharmacists altogether (and doctors, and lawyers, and every other profession you can name) -- and leaves men free to engage in transactions as they choose, according to their own best independent and individual judgment.

And when that day comes, every professional can "discriminate" in any way he wishes. If the majority of people in any profession (or any sizable number) behaves in ways that are irrational, others will come along quickly enough to replace them. But as long as the state maintains a stranglehold on people's ability to enter many fields, no one is genuinely free, neither the licensed professional nor the consumer.

The state touches our lives almost every second of our lives. In fact, the truth at this point probably is that the state touches our lives every second of our lives, period. That reality must first be recognized. Then it must be engaged -- so that finally, one day, it might be overcome.

(P.S. You might also want to take a look at these other related articles by Sheldon Richman: "Why Do Libertarians Ignore the Therapeutic State?," a consideration of the "myth of mental illness" and the revolutionary work of a true radical for liberty, Thomas Szasz; "The Fraud of Physician-Assisted Suicide," which argues that a correct analysis of the moral issue involved would lead to a repeal of all drug and prescription laws; and "The Inalienable Right to Self-Medication," the title of which is self-explanatory, and which deals with the Rush Limbaugh controversy of a few years ago. Or review all the articles on Regulatory Policy and Welfare at The Future of Freedom Foundation; you could spend a very worthwhile week or two there, and enjoy articles from a number of authors who take nothing for granted -- and who tackle these issues beginning with the most basic foundational issues.)